G.R. No. L-14242; June 30, 1960
LUZ B. PASCUA, plaintiff-appellant, vs. THE EMPLOYEES SAVINGS AND LOAN ASSOCIATION OF THE MANILA WATER SYSTEM, defendant-appellee. BEATRIZ MANINGAS VDA. DE CABRERA, Guardian ad litem of minor LEONCIO M. PASCUA, JR., intervenor-appellee.

FACTS

Leoncio G. Pascua, an employee of the Metropolitan Water District, was a member of the defendant Employees’ Savings & Loan Association. The Association’s by-laws provided that upon the death of an active member, all other members would contribute P5.00 each, and the collected amount would be payable to the beneficiary named in the deceased member’s application. In his original membership application, Leoncio designated his wife, Luz B. Pascua (plaintiff-appellant), as his beneficiary. However, on February 29, 1956, Leoncio sent a letter to the Association’s Board of Directors requesting that his son, Leoncio M. Pascua, Jr. (intervenor-appellee, through his guardian), born of Beatriz M. Vda. de Cabrera, be made a co-beneficiary in equal share with his legal wife, Luz. The Board approved this request by resolution. After Leoncio’s death in 1956, the Association refused to deliver the full death benefits (totaling P6,057.12) to Luz, prompting her to file an action. The Association justified its refusal by citing the deceased’s modification of the beneficiary designation. The minor son, through his guardian, intervened, claiming entitlement to one-half of the benefits and had already received P2,000.00 partially. The trial court ordered the Association to pay the intervenor one-half of the benefits, less the amount already received. Luz appealed.

ISSUE

Whether the deceased member, Leoncio G. Pascua, validly changed his beneficiary to designate his son as a co-beneficiary for a portion of the death benefits from the mutual benefit association.

RULING

Yes, the change of beneficiary was valid. The Supreme Court affirmed the lower court’s decision. The Court held that in mutual benefit associations, unlike in regular insurance contracts, a member generally has the power to change his beneficiary at will, provided no statute or the association’s rules expressly prohibit such change. The beneficiary in such associations acquires no vested right during the member’s lifetime but only a mere expectancy. In this case, there was no law prohibiting the change, the association’s by-laws did not forbid it, and the designation was not based on valuable consideration. The Association itself recognized this right by approving the change. The Court distinguished mutual benefit associations from insurance companies on this point, noting that the power to change the beneficiary is a recognized difference. The Court also ruled that the subsequent notarial will of the deceased, which also mentioned the benefits, did not abrogate the earlier valid designation made by letter, and the probate of the will is not a prerequisite for the payment of mutual aid benefits to a designated beneficiary. Therefore, the intervenor-appellee was rightfully entitled to one-half of the death benefits.